Question for our Canadian friends about VAT

kyhayman · Feb 24, 2010

Kind of off topic, but kind of not. As the idea of a VAT gets batted around I come to wonder how its applied at the farm level. Does the farmer pay VAT on gross receipts, net receipts, credits for VAT on inputs, etc? I understand the basics of a value added tax but was wondering how is it levied at the farm level?

Anonymous-0 · Feb 24, 2010

VAT here is 19%. Ag stuff (feed, seed, etc) is 7% and I believe farmers get a break on equipment/supplies.

Dave

MN Scott · Feb 24, 2010

VAT is basically a national sales tax. Most states have a sales tax. I assume it would be set up so everything you purchase good ol guberments dirty mits would get a percent on top of your states tax. At least VAT is a fair tax, if you can call any tax fair because everyone pays the same. Here in MN farmers are exempt from the sales tax for farm inputs, seeds, fertilizer, equipment ect.

RodinNS · Feb 24, 2010

In Nova Scotia we pay a Harmonized Sales Tax (HST) on everything except food and farm inputs directly related to food production... meaning we pay it on fuel but not seed, fertilizer. Currently it is 13% on top of the selling price.
That said... for ~any~ registered business, you are required to collect and remit tax and then you apply for a full tax refund on what you paid. It's intended to be revenue neutral for businesses. It's aimed at the final consumer on everything except food which is not taxed.
Really it's just a bit of paperwork to keep track of it, so there is a cost on that side but as taxes go it's rather simple in my opinion. It's really only a small amount more work for any business that's keeping records anyway. Probably one of the fairest, most evenly applied tax structures there is for the simple reason that there's no real way to beat it aside from going all cash.... which is not really realistic to do.

Rod

Burnie · Feb 25, 2010

In Australia, we pay a 10% Goods & Services Tax (GST) on everything except food. If you run a business, you submit a Business Activity Statement where you claim back the GST you"ve payed on input items. As Rod has said this is no great problem for anyone who is keeping good records. Most computer book keeping programs allow you to print out the information for a BAS statement. I restore furniture as a hobby so I don"t charge GST on items I sell, but I can"t claim a refund on GST I pay on stuff I buy. It"s not a bad system.

Anonymous-0 · Feb 26, 2010

Excluding biscuits , work that one out, people originally said you were only a tax collector for the Govt. and nothing has changed so extra costs were placed on businesses, but me being a consumer , guess who collects all the added costs. No prizes.

Question for our Canadian friends about VAT

kyhayman

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Anonymous-0

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MN Scott

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RodinNS

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Burnie

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Anonymous-0

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